On April 01, 2022, Chito and Ernie pooled their resources to form a partnership, with the firm taking over their business assets and assuming their business liabilities. On this date, their individual trial balances show the following: Chito Ernie P30,000 Cash Non cash assets P25,000 150,000 220,000 45,000 Accounts payable Notes payable Capital 60,000 100,000 105,000 115.000 The partners agreed that capital ratio must be 40:60 and that additional cash investment is to be made to raise the total capital to P350,000: • Non cash assets should be adjusted to their market values of: Chito, P120,000 and Ernie, P190,000. • Unrecorded liabilities in the books of Chito amounting to P5,000 while accrued interest on notes payable of Emie in the amount of P5,000 is to be recognized • Prepaid rent in the books of Ernie amounting to P6,000 is to be recorded. Determine the amount of additional cash invested by Chito to conform with the agreement:

On April 01, 2022, Chito and Ernie pooled their resources to form a partnership, with the firm taking over their business assets and assuming their business liabilities. On this date, their individual trial balances show the following: Chito Ernie P30,000 Cash Non cash assets P25,000 150,000 220,000 45,000 Accounts payable Notes payable Capital 60,000 100,000 105,000 115.000 The partners agreed that capital ratio must be 40:60 and that additional cash investment is to be made to raise the total capital to P350,000: • Non cash assets should be adjusted to their market values of: Chito, P120,000 and Ernie, P190,000. • Unrecorded liabilities in the books of Chito amounting to P5,000 while accrued interest on notes payable of Emie in the amount of P5,000 is to be recognized • Prepaid rent in the books of Ernie amounting to P6,000 is to be recorded. Determine the amount of additional cash invested by Chito to conform with the agreement:

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 4PB

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